5 Disadvantages of Receiving Debt Counselling

5 Disadvantages of Receiving Debt Counselling

If you’re considering getting debt counselling, there is an entire process you need to be aware of.

Debt counselling has both pros and cons to it, so you must consider both equally and think about how the disadvantages thereof can affect you in both the short-term, as well as the long-run.

The first thing you need to know is that debt counselling is offered to those who need help, due to being over-indebted and not having a solution to get out of their situation. They often also don’t have a stable financial plan to reconcile their debt, after they’ve agreed to pay it back.

If you’re battling with debt today, we bet the first thing to enter your mind is the fact you should’ve never opened that first credit account.

Being over-indebted is frustrating and can take a toll on many different aspects of one’s life, both personal and financial.

If you’re thinking about getting debt counselling, however, you must weight in the following disadvantages, before going all in.

The 5 drawbacks and regrets with debt counselling

You must pay for it – Surprise. Just when you thought your problems are solved. How are you supposed to spend a few thousand Rands for a service that’s supposed to help you get out of a financial struggle?

You’ll have to pay up to R6,000 for the services, as well as a 5% interest fee monthly going forward.

It’s not an easy way out – Unless you have money lying around, it might take quite some time to get out of debt. Debt counselling can be a long process and might even force you to adapt your lifestyle and live a somewhat lower-class type of lifestyle than you’re used to.

Debt counselling applications will end in court only – No, you’re not a criminal, but you need to appear in court to get consent from a judge for an appropriate agreement for you to pay back your debt, to avoid legal action being taken against you by the creditor.

Your monthly payments on the debt will be reduced – This is something that put most people off because they’ll have to take a more extended period to pay creditors back. The longer you take to pay creditors, the more interest gets added, which is something that is, most of the time, inevitable when a debt counsellor implements methods to help you get out of debt, to afford monthly instalments.

If your accounts have received legal action against it, you cannot receive debt counselling – This is due to being under debt review and only occurs when consumers take too long to get help from a debt counsellor.